Last week the Energy Information Administration (EIA) released its first publication of a new monthly report on US oil and gas production. According to the EIA:
Recent U.S. production growth has centered largely in a few key regions and has been driven by advances in the application of horizontal drilling and hydraulic fracturing technologies. Given the importance of drilling productivity trends as a driver for future domestic production, EIA has been developing new approaches to assess the productivity of drilling operations.
The new monthly Drilling Productivity Report (DPR) to provide region-specific insights into rig efficiency, new well productivity, decline rates at previously existing wells, and overall production trends. The DPR information will initially cover six regions (see map below). In 2011-12, these six regions accounted for 90% of domestic oil production growth and virtually all domestic natural gas production growth.
Here are some highlights of the EIA’s first Drilling Productivity Report:
1. Very quietly and apparently without any media attention, oil production in the Permian Basin surpassed one million barrels per day (bpd) in August 2011 (see chart above), giving the oil field in West Texas the distinction of joining an elite group of only six other super-giant oil fields globally to ever produce more than a million barrels of oil per day at their peak: Ghawar (Saudi Arabia), Burgan (Kuwait), Cantarell (Mexico), and Daqing (China) in recent years; and Samotlor (Russia) and Kirkuk (Iraq) in the 1970s and 1980s.
2. In August of this year, daily oil production in the shale-rich oil fields in the Eagle Ford area topped one million barrels for the first time (see chart above), and the South-Central Texas oil field joined the Permian Basin in the exclusive group of now only eight super-giant oil fields in the world that have ever produced oil at that level. Based on EIA estimates, Eagle Ford oil production in November will reach 1.092 million bpd, a 50% increase over the same month last year, and almost double the oil production just 18 months ago in May 2012 (557,502 bpd).
3. Oil production has surged so dramatically in the Eagle Ford area in recent years that it surpassed production in the North Dakota Bakken region in January of this year for the first time, and is expected to out-produce the Bakken in November by 13.7% (see chart above).
4. In November, the EIA estimates that the Bakken oil fields will produce almost 961,00 bpd, which suggests that by January 2014, North Dakota’s prolific oil-producing region will become the ninth super-giant oil field in the world to produce more than one million bpd.
5. In June (most recent month for international oil production data), the three most prolific US oil fields – Permian Basin, Eagle Ford, and Bakken – together produced more than 3.1 million bpd. To put that amount of oil into perspective, that’s almost as much oil produced throughout all of Canada in June at 3.66 million bpd, and slightly more oil than Iraq produced in June at 3.1 million bpd. If those three US oil fields were considered as a separate country, the Permian Basin-Eagle Ford-Bakken oil fields would have been the seventh largest crude oil-producing nation in the world in June.
MP: More good news and several important milestones for America’s booming energy sector from the latest EIA report, especially the fact that within just a few months the US will have three super-giant oil fields producing more than one million barrels of crude oil ever day. The Permian Basin, Eagle Ford and Bakken oil fields have become world-class producers of crude oil. And the shale-rich fields are not only pumping oil, but they are also pumping thousands of “shovel-ready” high-paying jobs into the local economies, pumping millions of dollars into local communities through the royalty payments made to hundreds of local farmers and landowners in the oil patches, and generally pumping energy-based wealth and prosperity into many small towns in Texas and North Dakota. Without the Great American Energy Boom and the economic stimulus it has provided, the US economy and job growth would be much weaker today, and the jobless rate would likely be higher. Thanks to America’s shale revolution, the US economy has been energized and the country’s economic future looks much, much brighter.